Report Title:

Capital Investments; State Private Investment Fund

Description:

Authorizes $ in tax credits to the Hawaii strategic development corporation for the purposes of Act 215, SLH 2004. (HB1723 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

1723

TWENTY-THIRD LEGISLATURE, 2005

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to capital investments.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that Act 215, Session Laws of Hawaii 2004, serves an important public purpose by answering Hawaii's need for more venture capital. There is a critical shortage of seed and venture capital resources in Hawaii, and that shortage is impairing the growth of commerce in the state. The availability of venture equity capital must be increased if Hawaii is to support its emerging enterprises, and allow them to expand, relocate, and restructure.

Act 215 provides a significant advance in capital formation for Hawaii's emerging technology firms and other fledgling, expansion-oriented companies. The contingent tax credits in Act 215 will be used by the Hawaii strategic development corporation to secure corporation loans to be invested in venture capital funds. By increasing return-driven, venture capital investments in emerging enterprises, Act 215 will help to diversify the State's economic base and will also benefit Hawaii's local venture capital companies by helping them build strong track records that will help them attract additional capital.

The purpose of this Act is to increase the availability of venture capital in Hawaii by:

(1) Authorizing the issuance of credits in the amount of $ to the Hawaii Strategic Development Corporation;

(2) Authorizing the corporation to transfer the credits as needed; and

(3) Authorizing the corporation to extend guarantees and incur debt.

SECTION 2. The corporation is issued tax credits in the amount of $ and is authorized to freely transfer those credits pursuant to section 211G-12, Hawaii Revised Statutes, to carry out the provisions of this Act.

The corporation shall limit the transfer of tax credits that may be claimed and used to reduce the tax otherwise imposed by chapter 235 or 241 for one fiscal year (including any tax credits that are carried over by a taxpayer from a prior fiscal year and used to reduce taxes otherwise imposed in the current fiscal year, as permitted in section 211G-12(g), Hawaii Revised Statutes, to not more than an aggregate total of $20,000,000 per fiscal year.

SECTION 3. The corporation is authorized to extend financial guarantees pursuant to section 211G-13, Hawaii Revised Statutes.

SECTION 4. The corporation is authorized to incur indebtedness in the amount of $ or whatsoever amount of credits is issued to the corporation pursuant to section 211G-14, Hawaii Revised Statutes, to carry out the provisions of this Act.

SECTION 5. This Act shall take effect on July 1, 2099.